Tribune subpoenaed on ESOP

The parent company of the LAT has provided the Labor Department with an "extensive range of documents" in connection with its employee stock ownership plan, the means by which Sam Zell was able to take over Tribune. You might recall that the ESOP is the subject of a lawsuit filed by current and former LAT staffers. No comment from the Labor Department on the inquiry. From the WSJ:

The court filing said the Labor Department probe concerns the Employee Retirement Income Security Act, a federal law that aims to safeguard participants in employee retirement plans by, among other things, requiring disclosure of funding details and risks. The Tribune ESOP played a crucial and unusual role in Mr. Zell's deal for Tribune. The plan borrowed the billions of dollars used to finance the deal and in turn received all of Tribune's common shares. The company has said the value and fate of the ESOP will be determined in bankruptcy court, though stock is typically wiped out in the bankruptcy process.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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